Prof M. Goosey
The drive to increase the numbers of electric vehicles on our roads has been given a boost in recent months with several governments announcing plans to limit or entirely ban the sale of new conventionally powered cars in the future. This is clearly needed if we are to solve the problems currently impacting major cities such as London, where there is acute air pollution from nitrogen dioxide emitted from vehicles. A key objective of the move to electric vehicles is to bring about an improvement in air quality in our cities.
However, at the moment, electric vehicles are relatively expensive compared to their fossil fuel powered analogues, costing typically up to twice the price. In order to make them more economically attractive to buyers and to encourage sales, many governments have chosen to offer subsidy schemes, including cash rebates on the purchase price and reduced levels of annual taxation. This has worked well in countries such as Norway where new electric car sales make up approaching 30% of the total. This has been achieved through a range of incentives; electric vehicle users do not have to pay import duties, they can drive in bus lanes and do not have to pay tolls. In the UK, the government has provided substantial subsidies of up to £5,000 for electric vehicle purchases, although this has now been reduced. It has been reported that, in the USA, it is possible to get as much as $15,000 in subsidies by combining federal, state, and local incentives. If one looks at the uptake of electric vehicles by country, there seems to be a correlation between the wealth of the country and the number of electric vehicles sold. In the case of Norway, the GDP per capita rate of €64,000 is around double the EU average. In the USA, 79% of the tax credits provided for electric car purchases went to people with annual incomes of more than $100,000 per year.
It is clear that electric vehicles are more likely to be bought by more affluent members of society and yet these people are also receiving substantial government subsidies. Such purchasers are not only more likely to be able to afford the higher cost of an electric vehicle, they are also more likely to have off road parking, or a garage where the car can be kept when not in use. This is very important because a key to the utility of an electric vehicle is having somewhere to charge it, ie access to a suitable power supply. In the case of electric vehicle owners who live in less expensive residential areas, where there is no off-road parking, the challenge of providing a charging capability becomes more difficult. Even if an owner can park the vehicle outside his/her property, connecting the car to a charger may require running a cable across the pavement. More commonly, however, it is often the case that car owners are unable to park outside their properties and thus they are unable to access their own metered electricity supplies. This problem could, of course, be solved by the use smart chargers that identify a vehicle and charge the registered owner, but this would need a huge infrastructural investment, not to mention the provision of an additional substantial electricity supply capacity.
There is a growing recognition that electric vehicles are too expensive and that the provision of subsidies to the relatively wealthy is not the best method for significantly increasing their numbers. There is no immediately obvious alternative, but it is likely that we will need to see significant price reductions and performance enhancements before the situation can change without the use of artificial and market distorting subsidies.